Tax-exempt bonds alternative way to finance

Aimed at addressing gaps in economic development needs

NORTH BAY -- Tax exempt bonds and loans are increasing as an alternative way for industrial, manufacturing and nonprofit construction projects to get financing.

In such a deal, bonds are issued by a governmental entity to obtain tax-exempt status and proceeds are loaned to the borrower to fund the project. The issuer acts as a conduit to the tax-exempt marketplace.

Bond proceeds can be used to fund the acquisition and development of capital assets.

[caption id="attachment_31646" align="alignright" width="154" caption="Simon Inman"][/caption]

“Essentially, it is a bank loan with a lot of paper,” said Simon Inman, an attorney with Carle Mackie Power and Ross in Santa Rosa. Mr. Inman has been on the legal side of eight of these transactions. He said as far as the borrower goes, just like a traditional loan, they have to qualify.

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